What is WIPO Doing to Combat International Patent Scams?

By Gene Quinn
March 14, 2012

Last month I wrote an article titled Trademark Skullduggery: Lawsuit Challenges Publication Service.  This article discusses the recent lawsuit by Leason Ellis against USA Trademark Enterprises, Inc., which is one of the many companies that sends unsolicited mailings to trademark applicants and owners seeking to sell what in my estimation are worthless publication services.  It is gratifying to see that recently the United States Patent and Trademark Office has posted a warning to its website warning individuals and businesses, saying: “Beware of companies with misleading solicitations to ‘help’ you with your trademark.”

Right after I wrote Trademark Skullduggery I was contacted by Matthew Bryan, who is the Director of the PCT Legal Division at the World Intellectual Property Organization (WIPO).  He suggested: “a patent-side profile may be very useful and help complete the picture on these notifications…”  It was an excellent suggestion, which lead me to write Patent Skullduggery: Patent Offices Warn of Patent Subterfuge. On the patent-side of the intellectual property world it seems that the schemes are even more scandalous because some companies seem send what truly appear to be official invoices.

As this was going on I contacted Bryan and asked him if he would be willing to answer a few questions on the record.  He graciously obliged, and this brief interview was conducted via e-mail. As you will see, these schemes are lucrative.  In one case that Bryan tells us about, in which he was an expert witness, a court in Florida “found that in the 2 years of operating, FIPTR had received over 2.5 million dollars in payments from PCT users just in the State of Florida.”  With that kind of money potential it is easy to see why the scams persist.

Without further ado, here is the story about what WIPO is doing to warn PCT users of the various and sundry patent schemes out there that seek to part you with your hard earned money without getting any benefit in return.

[International]

QUINN: Why did WIPO feel it was necessary to put together the WARNING page? Were you receiving a lot of questions or complaints?

BRYAN: Because starting in 2002 WIPO began to receive copies of these notifications from PCT users, in many cases evidencing confusion as to whether they needed to pay them or not, whether they were from WIPO or some other official source. We also received messages to the extent that users had paid the fee requested in the “invoice” and were after the fact questioning whether they needed to have done so. We became aware that there was an element out there populating mass mailings with data from the WIPO PATENTSCOPE database of published PCT applications, and trying to mislead them into paying fees which had nothing to do with the processing of their PCT application. We have added to the collection on the WARNING page every time we receive a new, unique instance of an invitation.

QUINN: Over half of the illustrative examples on the WARNING page are from 2010 – present. Is this a fairly recent phenomenon? Has this becoming a larger scale problem recently? If it has been a growing problem have you noticed this coinciding with the global economic downturn?

BRYAN: There does appear to have been a surge in such invitations, coming from entities in many countries over the last several years. We receive more and more copies of invitations also, I think, because we have been trying to raise awareness among PCT users. I don’t know what if any connection there might be between this uptick and the global economic downturn.

QUINN: What should someone do if they receive one of these invoices?

BRYAN: They should first check our warning page and see if it matches any of those examples. If they have a doubt they can always email or fax it to us and we will immediately respond as to whether it is something official or not. Applicants or inventors should show them to their patent attorney. Probably most vulnerable are the individual inventors and small entities, who are trying to navigate the patent system on their own, or with minimal assistance from a patent attorney.

QUINN: How can one tell if they are receiving a real WIPO invoice? (i.e., seal, bank account, how funds are accepted, etc.)

BRYAN: First of all, WIPO does not charge any special fee for listing the published application in a database—that is part of the service provided by WIPO for the international filing fee paid by the applicant at the time of filing. Thus WIPO will never be sending any invoice about the topic dealt with in most of these invoices—inclusion of your application in a database or register. In WIPO’s view, the “service” offered by those entities which send these invitations has no value—the data about the published international application is already available in WIPO’s database, and is made available in a way which is much more easily searchable and complete.

Secondly, in the context of a PCT application, applicants will only ever receive invitations to correct or pay missing fees, etc. from a national patent office, a regional patent office (as the case may be) or WIPO itself—not from any other entity.

QUINN: Has WIPO ever gone after these entities, or are there any enforcement actions ongoing alleging fraud or misrepresentation?

BRYAN: WIPO has made numerous efforts in relation to these misleading notifications, and continues to do so, including the following:

  • creating and maintaining the WARNING page, and notifying PCT users in the monthly PCT Newsletter any time a new instance is posted on the page
  • a letter sent by the WIPO DG to the heads of all world patent offfices asking for assistance and cooperation in warning users and taking actions against the purveyors of these notifications (link on the WARNING page)
  • a letter sent by the WIPO DG to all IP agent associations asking for assistance in warning clients, and providing them a text to do so (link on the WARNING page)
  • WIPO letter to the banks providing services to these entities, warning them of the activities of their clients and requesting that they cease cooperating with them
  • longstanding outreach to PCT users and their agents, warning and asking them to work with us in building client awareness and in taking action against these entities
  • WIPO has targeted specific countries where high volumes of these invitations appear to be sourced, has called in government officials and requested their cooperation in taking action against the entities
  • outreach to US state officials and US federal agencies about those invitations emanating from the US. We typically either get no response from the consumer protection officials we contact, or we are informed that no complaints about this conduct have been received. We thus encourage PCT users to complain to their state and federal consumer protection authorities
  • WIPO was requested to cooperate with the Attorney General’s Office of the State of Florida in a civil action under the State’s Deceptive and Unfair Trade Practices Act (FDUTPA) against one such entity, Federated Institute for Patent and Trademark Registry Inc (FIPTR) (State of Florida, Office of the Attorney General v. Federated Institute For Patent and Trademark Registry and Bernd Taubert). I appeared as an expert witness in that case about the PCT and the value of the “service” being offered, having been given access by the Attorney General’s Office to the online FIPTR database relating to the applications of those who had paid the requested fees. The Florida AG’s office won that case, with sizeable compensatory and civil penalty awards (2.5 million and 2.1 million, respectively), and the case is still winding its ways on appeal and in bankruptcy proceedings. The court found that in the 2 years of operating, FIPTR had received over 2.5 million dollars in payments from PCT users just in the State of Florida.

 

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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There are currently 1 Comment comments.

  1. Paul F. Morgan March 15, 2012 1:50 pm

    Sounds like WIPO is doing a better job than the U.S. It took until 1999 to finally even get some protective U.S. legislation as to some “invention promotion companies” taking millions of dollars from small inventors, for things like printed materials and thousands of effectively worthless design patents instead of real [utility] patents.